📈 Sri Lanka Secondary Bond Market Activity Picks Up Amid T-Bill Auction Focus

The secondary bond market saw a resurgence in activity as yields compressed from morning opening quotes, driven by steady institutional buying interest following the recent Treasury Bond auction outcomes. • Bond Yields Adjust: Yields adjusted downward on steady demand. The 01.08.30 and 15.10.30 maturities traded down to 11.50% and 11.57% respectively. Longer-tenor maturities like 15.10.34 and 01.07.37 traded down to 12.00% and 12.58% respectively. • Rs. 120 Bn T-Bill Auction: Today's scheduled Treasury Bill auction will offer Rs. 120 Bn (comprising Rs. 55 Bn on 91-day, Rs. 35 Bn on 182-day, and Rs. 30 Bn on 364-day maturities). This is slightly below the estimated maturing volume of Rs. 147.72 Bn. At last week’s auction, yields held steady with the 91-day rate at 10.21% and 182-day rate at 10.30%. • Money Market Liquidity: Net liquidity surplus was recorded at Rs. 151.99 Bn. The Central Bank absorbed Rs. 101.99 Bn via the Standing Deposit Facility (SDF) at 8.25%, and Rs. 50 Bn via an overnight Repo auction at a weighted average rate of 8.69%. Weighted average overnight call money and Repo rates stood at 8.96% and 9.00%. • Rupee Slips Marginally: In the forex market, the USD/LKR spot contracts closed slightly weaker at Rs. 336.30/336.40 compared to the previous close of Rs. 336.00/336.25. The total USD/LKR traded volume stood at US$ 45 Mn on 13 July.